U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19212 / May 2, 2005

SEC SETTLES WITH FORMER U.S. POSTAL WORKER WHO TRADED AND TIPPED ON INSIDE INFORMATION IN BUSINESS WEEK MAGAZINE

The Securities and Exchange Commission announced today that it reached a settlement with Davi Thomas, a former U.S. Postal Service employee now residing in Kerala, India for allegedly illegally tipping and trading on misappropriated information about companies featured in the "Inside Wall Street" column of Business Week magazine. Thomas, who lived in Mount Vernon, N.Y. during the time of the relevant conduct in the late 1990s, illicitly obtained the information from the magazine, which he intercepted from the U.S. Mail on its way to subscribers and news stands, in violation of postal regulations. Thomas shared information from the "Inside Wall Street" column with a friend and traded in his own accounts. Thomas' trading in stocks mentioned in a year-and-a-half period enabled him to reap profits of $154,268.61. Thomas's friend, Lionel Thotam, who settled with the Commission in October 2002 for insider trading, profited by $77,213.38 from inside information Thomas provided him.

Under the terms of the settlement, Thomas has consented, without admitting or denying the allegations of the Commission's Complaint, to the entry of a final judgment that (1) permanently enjoins Thomas from future violations of Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, (2) orders Thomas to disgorge the $153,711.99 in profits and to pay prejudgment interest in the sum of $273,503.73, and (3) orders Thomas to pay a civil penalty of $153,711.99. The relief was ordered by Judge Arthur D. Spatt of the United States District Court for the Eastern District of New York.

The Commission's Complaint alleges as follows:

From August 1996 through January 1999, Thomas misappropriated information from Business Week magazine before its public release by reading the Inside Wall Street column in the magazine as it passed through the Mount Vernon, New York postal sorting facility on its way to subscribers and news stands. He tipped Thotam to the information. Thotam paid Thomas $10,000 for Thomas's efforts, and updated Thomas on his profits from the illegal trades. Starting in June 1997 and continuing through January 1999, Thomas also traded in his own accounts in the stocks of the companies mentioned in the Inside Wall Street column. In almost all instances, Thotam and Thomas bought stock of companies favorably mentioned in the column on Thursday afternoons and sold the stock after the price increased the next day, after the column had been published. Thomas's profits amounted to $153,711.99. By tipping Thotam to material, nonpublic information in breach of confidentiality requirements of postal regulations, and by trading on such information himself, Thomas violated the antifraud provisions of the Exchange Act.

The Commission acknowledges the assistance of the American Stock Exchange and the United States Attorney's Office for the Eastern District of New York.